London -LRB- CNN -RRB- -- European leaders recently thrashed out a deal aimed at ending months of uncertainty over the future of the euro and resolving an escalating debt crisis that has pushed several economies to the brink of collapse .

The eurozone fiscal pact has to be ratified by 12 participating nations . The UK refused to sign up to the deal and now Ireland has called a referendum on the treaty -- a decision that could cause difficulties for the agreement .

So what was originally agreed in the treaty negotiations ?

The `` fiscal compact '' outlines the closer integration of the national budgets of the 17 eurozone countries . A new legal framework and greater fiscal scrutiny will be imposed to avoid a repetition of the dubious financial practices that triggered the crisis . The treaty also agrees to strengthen mechanisms that guarantee short-term stability to euro economies in hot water .

The main points are :

• The legal framework will see those signed up to the deal effectively hand more sovereign powers over to centralized European control .

• Under the new deal , eurozone nations must be deliver `` balanced '' budgets , designed to ensure there is no repeat of the overspending and under taxation that left Greece in need of a bailout . All plans to issue national debt must be reported in advance .

• The current European Financial Stability Facility -LRB- EFSF -RRB- , the money-lending safety net created by the eurozone last year to combat the crisis , will be phased out in mid-2013 .

• The implementation of the eurozone 's permanent bailout fund , the European Stability Mechanism -LRB- ESM -RRB- , brought forward to 2012 , will run alongside the existing fund for about a year .

• Voting rules in the European Stability Mechanism will be changed to allow emergency decisions to be passed with an 85 % qualified majority -- an attempt to move away from the deadlock that has stymied earlier bailouts .

Where will the money come from ?

Bailout money comes from selling bonds guaranteed by eurozone countries . The bonds are bought by investors -- which can include countries like Japan -- in return for interest . The cash raised is then lent to the eurozone countries in trouble .

The EFSF was set up in a hurry after Greece 's May 2010 bailout , and was only ever meant to be temporary . Its lending firepower has been boosted to $ 440 billion from an original $ 250 billion .

The ESM will get $ 700 billion in funds paid in by eurozone countries relative to the size of their economies . That cash will likely come from national treasuries . That chunk of cash sitting as back-up means the ESM will be able to lend up to $ 500 billion when it is fully operational .

The $ 200 billion earmarked for the IMF will come from Europe 's national central banks . It will likely come from the banks ' reserve funds , although the details are not yet agreed .

What sanctions can be imposed on countries that breach the deal ?

The deal says there will be `` automatic consequences '' including possible sanctions if member states exceed a 3 % deficit ceiling -- in other words , greatly spend beyond their means .

There will be graduated financial sanctions for those countries which consistently breach the ceiling .

What are the consequences for the financial markets ?

Global stocks were mixed after the deal was unveiled and analysts warn only time will tell if it can work . The plan could supply short term stability but previous experience on euro crisis measures shows relief can be brief .

Elisabeth Afseth , of Evolution Securities , says its success may depend on whether markets believe Europe 's politicians will stick to tighter financial supervision .

Has everyone agreed to the deal ?

No . Talks have been fraught and the resulting deal threatens to become one of the most divisive issues the 27-nation European Union has ever faced .

Some European Union nations have balked at ceding further powers to EU authorities and have threatened to walk away . Some say this will result in a two-tier European Union .

So who is in and who is out ?

All 17 eurozone nations and six other EU states outside the euro area have signed up . Initially , four countries cast doubt on the deal , complaining that it sweeps away some of the away hard-fought foundations of the European Union .

Sweden 's Prime Minister Fredrik Reinfeldt told CNN that he had no mandate for treaty change . But , alongside Hungary and the Czech Republic , he said his country would leave the door open .

This leaves Britain , under Prime Minister David Cameron , alone among the 27 European Union nations to point-blank refuse to sign . Cameron said the treaty failed to safeguard Britain 's voice in crucial policy decisions over the European single market and financial services sector . He said he had effectively vetoed an original deal , forcing German Chancellor Angela Merkel and French President Nicolas Sarkozy to forge ahead with a treaty that will be subservient to EU regulations .

Ireland has decided to hold a referendum on the fiscal pact because under the Irish constitution the people have to vote to ratify any significant transfer of sovereignty to Europe . It is likely to take at least three months to organize the referendum . The Irish have twice rejected EU treaties , only to approve them in second referendums .

Is this the beginning of the end for the European Union as we know it ?

The treaty has exposed deep divisions between European Union members -- chiefly Britain and the rest of the bloc .

This sets the stage for a series of legal challenges as Britain strives to ensure the treaty does not result in a wholesale restructuring of the EU .

With Britain forcing the treaty to operate outside EU mechanisms , there could be an appetite among the rest of Europe to cold shoulder the UK and concentrate resources within their new club .

That said , Britain 's prior refusal to join the euro and pervading `` euro scepticism '' could just mean the new treaty reinforces the status quo , albeit with frostier relations .

So will this solve the crisis ?

The new treaty was not due to be finalized until March this year -- after which it will have to be ratified by all participating countries . The Irish vote will likely delay this process .

Even aside from the potential spanners in the works presented by Britain , Hungary , Sweden and the Czech Republic , grim prospects for the euro and European Union still lurk on the horizon .

Ideally , everyone will stick to the new rules , and those countries that require emergency bailouts will be granted them , allowing the European Union to slowly put its debt problems behind it .

The danger is that with politically-unpopular austerity measures biting deep , the new stricter controls on government borrowing will become unworkable . This could lead to an evaporation of investor confidence , the collapse of debt-exposed banks , an emptying of government coffers , a nosedive by share markets , and bleak prospects for the euro .

@highlight

`` Fiscal compact '' lays out tighter financial rules for eurozone countries

@highlight

Deal also strengthens mechanisms to safeguard financial stability and bailouts

@highlight

Britain has walked away from deal , raising prospect of EU in-fighting

@highlight

Ireland has decided to hold a referendum on the fiscal pact which could take months to organize